Ravikumar Duraisamy, Member - (1.) The present Company Application is filed before the then Hon'ble Company Law Board, Chennai (CLB). Since the National Company Law Tribunal (NCLT), Hyderabad has been constituted for the cases pertaining to the states of Telangana and Andhra Pradesh, the case is transferred to this Bench. Hence, we have taken it on records of NCLT, Hyderabad Bench and deciding the case.
(2.) The present application is filed by the Applicants under Section 621A of the Companies Act, 1956 for compounding the offences under Section 217 of the Companies Act, 1956 before the Hyderabad Bench of NCLT, praying the Tribunal to take a lenient view in compounding the offences committed under the Companies Act, 1956.
(3.) The brief facts of the case as averred in the Application are as follows: a. Deccan Chronicles Holdings Limited (hereinafter referred to as "Company") was incorporated on 16th December, 2002, under the provisions of the Companies Act, 1956 and registered as a Limited Company with the Registrar of Companies, Hyderabad (RoC) having CIN L22122AP2002PLC040110. b. The present Authorised Share Capital of the Company is Rs. 70,00,00,000/- (Rupees Seventy Crore only) divided into 35,00,00,000 Crore (Thirty Five Crore) Equity Shares of Rs. 2/- each out of which Rs. 41,79,44,438/- (Forty One Crores Seventy Nine Lakhs Forty Four Thousand Four Hundred Thirty Eight only) divided into 20,89,72,219 (Twenty Crores Eighty Nine Lakhs Seventy Two Thousand Two Hundred and Nineteen only) Equity Shares of Rs. 2/- each have been issued and have been fully subscribed and paid up. c. The main objects of the Applicant Company are to carry on business of printers and publishers of newspapers, magazines, periodicals, journals, books and pamphlets and other library works in different languages and to carry on all or any of the business of printers, publishers, stationers, lithographers, typefounders, sterotypers, electrotypers, off-set printing, photographic printers, photolithographers, chrome-lithographers, engravers, diesinkers, book binders, card printers, Calendar printers, translators, paper and ink and or other stationery goods, book sellers, advertising agents, Engineers, and dealers in or manufacturers of or importers and exporters of any other article, goods, finished or unfinished or other things of a character or kind similar or analogous to the forgoing of any of their connected directly or indirectly with them, etc. d. Section 217(1)(d) reads as follows: Material changes and commitments, if any; affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the balance sheet relates and the date of the report. e. Section 217(2) reads as follows: The board's report shall, so far as is material for the appreciation of the state of the Company's affairs by its members and will not in the Board's opinion be harmful to the business of the company or of any of its subsidiaries, deal with any changes which have occurred during the financial year. (a) in the nature of the Company's business; (b) in the Company's subsidiaries or in the nature of the business carried on by them; and (c) Generally in the classes of business in which the company has an interest. f. The Applicants submitted that the Board of Directors of the Company at its meeting held on 11.06.2009 had taken note of Deccan Chronicle Bangalore Limited (DCBL) becoming subsidiary of the Company with effect from 25.04.2009; It is further submitted that Investment in Deccan Chronicle Bangalore Limited is comparitively small with reference to the size of the Company and its total investment, and further submits that the investment in DCBL has been correctly treated in the financial statements of the Company in line with Accounting Standard-13 issued by the ICAI and the guidance note then in force. It is also submitted that failure to make a report in the Directors' Report about the material changes and commitments with respect to subsidiary company namely DCBL was only due to inadvertence and there was no other intention to violate the provisions of Section 217 of the Companies Act 1956. g. A Show Cause notice No. RAP/209A/DROC(SRD)/CK/DCHL/Sec.217(193) /2014/1148/9, dated 05.08.2014, issued by the Registrar of Companies, Hyderabad for Andhra Pradesh and Telangana, and subsequently, the present application is filed for compounding of offence under Section 621 A of the Companies Act, 1956. h. It is further submitted that the Management of the Company had taken all reasonable/necessary steps to ensure compliance of Section 217 of the Companies Act, 1956 in future and that the said default was neither intentional nor willful but due to inadvertence.;